1972 (1) TMI 87 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the proviso to section 13(6) of the Bihar Sales Tax Act, 1947 regarding the limitation for assessment.
2. Determination of whether the reassessment made on 28th November 1952 was time-barred.

Analysis:

Issue 1: Interpretation of the proviso to section 13(6) of the Act
The case involved a dispute regarding the application of the proviso to section 13(6) of the Bihar Sales Tax Act, 1947, which sets a limitation for initiating proceedings for assessment. The Commissioner of Sales Tax had directed a reassessment, and the question was whether this fell within the limitation period. The argument made on behalf of the dealer was that the reassessment made on 28th November 1952 was beyond the two-year limit from the date of the Commissioner's order, thus rendering it time-barred. However, the State contended that the initiation of the proceeding had already occurred when the dealer filed its return, and the reassessment was merely a continuation of the same proceeding. The court agreed with the State's argument, citing the proviso to section 13(6) and the Supreme Court's interpretation of the term "initiate" in a similar context. The court held that the reassessment did not require a fresh initiation of proceedings, as it was based on the original return filed by the dealer.

Issue 2: Determination of the reassessment's timeliness
The court further analyzed the procedural aspects of the reassessment process under section 24 of the Act. It highlighted that if an assessment is set aside with directions on how to proceed, there is no need for a fresh initiation of proceedings. The court emphasized that in such cases, the assessing officer is bound by the directions of the superior authority and does not need to initiate a new assessment process. Therefore, in the present case where the assessment was set aside with specific directions, the court concluded that the limitation period specified in the proviso to section 13(6) did not apply. Ultimately, the court answered the question referred to it in the affirmative, ruling that the reassessment was not time-barred.

In conclusion, the court's judgment clarified the interpretation of the proviso to section 13(6) of the Bihar Sales Tax Act, emphasizing that in cases where reassessment is based on directions from a superior authority and not a fresh initiation of proceedings, the limitation period for assessment does not apply.